Archive for August 2019

The Friday File: Very recently, a pair of unworn 1972 Nike waffle racing flat ‘moon’ shoes sold at auction for $437,500, surpassing the previous sneaker record of $190,373 set in 2017 for a pair of signed Converse sneakers worn by Michael Jordan in the 1984 Olympic basketball final. Recently, a lot of 99 pairs of…

While the yield curve has inverted and the yield on the 10-year Treasury has fallen by half, it’s higher than in most of 2016 when it didn’t suggest a recession. The problem, in retrospect, was the Fed raised rates too much in 2018 thinking that the tax cut would do better for the economy than…

In 19Q1, US GDP was $21.06 trillion. The largest part was consumption, which totaled $14.25 trillion or 67.7% of GDP. Investment in structures, equipment and intellectual property was $3.81 trillion or 18.1%; government spending was $3.60 billion or 17.1% of GDP. Finally, net exports were -$603.4 billion, or -2.9%; we run a trade deficit. Consumption…

In 19Q2, the homeownership rate fell to 64.1% from 64.3% in 18Q2, the first Y-o-Y decline since 2016. And high home prices are why. They’re high partly because inventory, which had been marginally improving for 10 straight months, was disappointingly flat in June, and because new construction activity has been shrinking and thus detracting from…

The direct effects of the China-US trade spat on the US are small. It’s secondary effects, like weakening global growth, declining equities, Chinese retaliation, and falling US consumer and business confidence leading to reduced capital investment that’ll hurt. Moreover, the newest potentially tariffed Chinese imports are consumer goods, and US consumer spending drives growth. Collectively,…

The Friday File: The late Robert Byrd (D-WV) cast 18,689 votes, more than any other senator. The late Strom Thurmond (D,R-SC) follows with 16,348, then the late Daniel Inouye (D-HI) at 16,300. Patrick Leahy (D-VT) follows with 16,007 and in a year should pass Thurmond and Inouye. Charles Grassley (R-IA) is 2nd among active senators,…

From 1992-2014, Canada was our top trading partner, but its share of total US trade steadily declined from 21% to 16%. At the same time Mexico’s grew from 7.5% to 14% and China’s from 3.5% to 15%. From 2015-2018, China was the top trading partner with a 16% share, Canada followed at 15%; Mexico at…

Puerto Rico’s population peaked in 2004 at 3.8 million. It’s declined steadily since. Worse, the rate of decline has continually worsened. In 2009-2010 the population declines were just 4,000 and 7,000 respectively. From 2011-2013 they were 53,000/year; from 2014-2016 they were 65,000/year. In CY2017, 78,000 (hurricanes Maria and Irma hit in 9/17) and in 2018…

With new British Prime Minister Boris Johnson pushing for a hard Brexit on 10/31/19, the pound is approaching a 35-year low! Since April, every ten-percentage point swing in the chances of a hard Brexit result in a 3-cent change in the value of the pound. At that rate, a hard Brexit will push the pound…

The US economy created 164,000 jobs in July, bringing the average YTD gain to 165,000/month, down from 227,000/month through 7/18. The unemployment rate held at 3.7%, and wages grew a respectable 3.2% Y-o-Y. And, the broadest measure of unemployment hit 7%, its best since 12/00! But the workweek shrank, and (like in the last three…